Australian Dollar Falls On Lockdown Extension In Sydney

The Australian dollar was lower against its major counterparts in the Asian session on Wednesday, as a lockdown in Sydney was extended by four weeks as coronavirus cases continue to rise despite stay-at-home orders since late June.

The state of New South Wales, of which Sydney is the capital, reported 177 new infections on Tuesday, its biggest daily increase since March 2020.

The states of Victoria and South Australia lifted the lockdowns after outbreaks came under control.

NSW State Premier Gladys Berejiklian warned of tougher policing to boost enforcement of wide-ranging social distancing rules.

As a sell-off in Chinese shares, along with economic slowdown worries due to the spread of the Delta variant virus also weighed on the currency.

Investors await a statement from the Fed policy meeting and a press conference by Fed chair Jerome Powell due tonight for clues on the timing of stimulus tapering.

The aussie fell to 0.7349 against the greenback and 80.67 against the yen, off its early highs of 0.7375 and 81.05, respectively. The aussie is likely to locate support around 0.70 against the greenback and 78.00 against the yen.

Reversing from its early highs of 1.6028 against the euro and 1.0594 against the kiwi, the aussie depreciated to 1.6078 and 1.0567, respectively. The aussie is seen locating support around 1.63 against the euro and 1.03 against the kiwi.

The aussie edged lower to 0.9248 against the loonie, after rising to a 5-day high of 0.9279 earlier in the session. On the downside, 0.90 is possibly seen as its next support level.

Looking ahead, Swiss economic sentiment index for July is set for release in the European session.

Canada CPI, U.S. wholesale inventories and advance goods trade balance, all for June, are due in the New York session.

At 2:00 pm ET, the Fed announces its decision on interest rate. Economists widely expect the federal funds rate to be kept at 0-0.25 percent.